A brighter future for 7 million Californians

Secure Choice – the little bill that grew to become historic state law with the help of SEIU California members

Gov. Brown signed historic legislation, Senate Bill 1234 – Retirement Savings Plan (De León), into law on September 29. Also named Secure Choice, the program will lay down another path to retirement security for nearly 7 million California private-sector workers.

California sets a nationwide standard as it becomes the largest state with a statewide retirement plan that mandates companies with 5 employees or more to enroll their workforce if they don’t currently offer a retirement savings plan at work. This is a huge breakthrough for women, low-wage workers and people of color, who are the most likely to face poverty when they stop working. Read the New York Times editorial “From California, A Better Way to Retire.”

“The work to bring retirement security to all and to lift working families out of poverty is not a union fad. Unions have always been involved in, and indeed, led, movements that build a better society. We believe people who work deserve to be able to also live. It’s about fairness, it’s about social justice, and it’s about doing the right thing as a society.”– Mullissa Willette, County worker and SEIU 521 SecretaryRead the op-ed from SEIU 521 Secretary Mullissa Willette in the Mercury News.

No one should have to work until they die – that’s why we pushed for Secure Choice and that’s why we’ll continue fighting to strengthen Social Security at the federal level. Join our committee, change lives!

This victory shows the importance of developing leaders and engaging our members:

Matt Nathanson speaking to the Secure Choice Board in favor of the safer investment options, the workers’ choice

“This is one of those days when I am proudest to be a union member. Now that Secure Choice is the law of the land, millions of women and men who are working today in California will be able to start saving for a dignified retirement. By fighting for and winning Secure Choice we have shown that as union members we will stand up for all working people in our state. Already other states are looking to the California Secure Choice retirement plan as a model. Every one of you who is an SEIU member has the right to feel proud too. We only win big because we are united together!”– Matt Nathanson, Retirement Security for All Committee Chair

We are engaging younger activists in the labor movement and in the fight for social, economic and racial justice:

“Secure Choice will finally provide an option for older generations and the next generations to be able to retire with dignity. It gives hope for young people like me, and also might provide relief to people like my old aunt who had to struggle all her life. It was a great experience to be involved with Children Over Politics to make sure this bill becomes a reality. We are the future and we need to be able to retire with dignity.”– Gloria Araiza, Children over Politics Youth LeaderWatch Gloria speaking on March 3rd here.

This victory also shines the light on how critical it is that we as union members build political and community power. This is how we were able to achieve results:

“I am proud to have participated with other SEIU 521 members in making sure this bill becomes a reality through our work with the Secure Choice Board, public testimonies, letters, and phone calls. It’s a historic moment for California!”– John Adams, Fresno County Planner III

Nearly 1 in 3 California seniors currently live in poverty – and half of all seniors have no retirement savings at all.

“Before this law was passed, I thought I would have to keep working until I die,” said Blanca Rodrigues, a single mother who lives in San Jose and has two jobs, working at McDonald’s and a 76 gas station. “I work nonstop just to pay the rent and help my kids pay for college – so retirement has been such a far off dream. With Secure Choice, just saving a little will go a long way toward helping me achieve a future where I can spend more time with my family.”

The reason for our support from the beginning is simple: As hard as SEIU Local 521 has fought to retain our members’ public-pension retirement benefits, we are working toward a future where our members’ families, friends and neighbors also have that security. Some of the workers we represent didn’t have any public-pension or retirement savings plan at work.

“I am 52 years old and I have being working in Fast Food Industry for 15 years. I have always worked 2-3 jobs to make ends meet. I supported Secure Choice because is important for every worker to have a retirement savings plan. I just finished sending my children to college and will now start to try to put some money on the side for retirement. The future really worries me since as I am getting older, I have less opportunities to be hired or won’t be getting enough hours.”– Pablo Narvaez, Fast Food Worker

We believe that no hard working Californian should have to choose between working until they die or retiring in poverty, and we want a healthy, vibrant economy where seniors can retire in dignity.

SIMPLE. The Secure Choice Retirement Savings Plan starts with an automatic payroll contribution of 3% of salary into a personal retirement plan, with the option to opt-out or change contributions at any time. There might be an automatic escalation of contribution rates up to 8% of salary with participants’ ability to stop or change the rate.

SAFE. For up to the first three years of the program, the Secure Choice Board will establish managed accounts invested in U.S. Treasuries, or similarly low-risk investment, and develop investment options that address risk-sharing and smoothing of market losses and gains. SEIU members were key in promoting that aspect of the plan to keep these investments safe. Participants’ fees will be low. The Secure Choice Board, and its relevant contractors, will have a fiduciary duty to the participants of the program.

PORTABLE. Private-sector employees can contribute to their account throughout their working life. The plan will not be attached to one employer.

Timeline: A Look Back

2012 – From the beginnings to the new law

Secure Choice – SB 1234, co-authored and introduced by Sens. Kevin de León and Darrell Steinberg on Feb. 23, 2012, established California as a leader among states in creating new retirement plans for private-sector workers. SEIU Local 521 changed the name of its “Pension Committee” to “Retirement Security Committee” and started to support it from the beginning and informed our members about the new bill.

Wall Street executives and the mutual fund industry were lobbying furiously to defeat this bill, but fortunately our members and other workers continue to push forward and lawmakers approved it on Sept. 1, 2012.

Fast-forward to 2015, with the technical details of making the program work

Rachel Welch spoke at the Secure Choice Board meeting on Feb. 23, 2015 thanking the board for moving forward with the feasibility study and market analysis.

Secure Choice Public Hearing, March 3, 2016

On Jan. 11, 2016, the Secure Choice Board discussed how the fund should be invested. We encouraged the Board to pick the option that doesn’t play roulette with Wall Street, and instead focuses on guarantees for California’s future retirees. Again on March 3rd, we encouraged the board at public hearings to specifically select the safest investment option for private-sector workers, the pooled IRA with a reserve fund, that will spread risk and be more stable and capable of paying monthly benefits consistently.

Our members and other workers frequently spoke at various Secure Choice Board meetings on behalf of their communities and family members. We faced initial opposition from business and investment groups, but were able to continue to push for safer investment options.

All our efforts paid off on March 28 when the board voted unanimously to send language to the legislature giving them the authority and the direction to explore options that include smoothing and reduce timing risk, including an investment option with a reserve fund and a mandate to seek to lower fees for participants.

The Secure Choice Retirement Plan recommended by the board passed the Senate on June 3rd, 2016. A dozen SEIU 521 members attended the public hearing on Aug. 11 in Oakland and testified in support of the bill in front of the Assembly Appropriations Committee, which then passed the bill. The California Assembly just passed the bill on Aug. 25 and now Gov. Brown just signed into law.

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